The UK government is to introduce a form of debt relief for struggling high street retailers hit hard by the Covid-19 pandemic.

The measures, which are temporary, include voiding statutory demands and petitions to wind up, with changes to be made to the use of the commercial rent arrears recovery procedure.

The business ministry says that while the majority of landlords and tenants are reaching agreements on debt obligations, some landlords have been putting tenants under “undue pressure” by using aggressive debt recovery tactics.

The new regulations will ban the use of statutory demands and winding up orders where a business cannot pay its bills due to coronavirus, to ensure they do not fall into deeper financial difficulty or go out of business. The measures will be included in the Corporate Insolvency and Governance Bill, which business secretary Alok Sharma set out earlier this month.

Landlords will not be allowed to use the CRAR procedure to recover unpaid rent, unless the tenant is more than 90 days in arrears. 

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Sharma said: “It is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic. Our unprecedented package of support can help commercial landlords, including through the recent expansion of the Coronavirus Business Interruption Loans Scheme.

“I know that landlords are under pressure but I would urge them to show forbearance to their tenants. I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the Covid-19 emergency continues.”

The new regulations and legislation will be in force until June 30, with the possibility of extension in line with the moratorium on commercial lease forfeiture.

British Retail Consortium chief executive Helen Dickinson commented: “Rents are a huge burden for retailers that must be paid even where shops are closed. We have raised this problem with government and today’s announcement protects firms who are unable to meet their rent obligations. We thank Alok Sharma for his swift action, which will give retailers some vital relief and help safeguard millions of jobs all across the country."